Positive outlook for community business in 2018

Despite an overall economic slump, community businesses across England are bucking the trend. A new study shows that almost two thirds of community businesses are confident about the coming year, up 16% compared to last year.

This comes as the Federation of Small Businesses reports a slump in confidence among its sector.

The Community Business Market 2017 research estimates that there are now around 6,600 community businesses in England.

Although the number of community businesses has declined since last year, their total income is higher, with combined market income estimated at £1.2bn and total assets of £0.7bn.

The total number of paid staff and of volunteers have also dipped since 2016, but changes in how data is collated and reported could account for the decline.

Confidence is on the up across 63% of the community businesses surveyed, compared to last year’s data which found that only 47% were confident about the year ahead,

Around 20% are feeling less confident about the coming year, compared to 28% last year.

The majority of businesses plan to increase their volunteers and income from trading, contracts and grants, while over a fifth plan to access crowd-funding. Almost half plan to hire more paid staff.

This is the third year that Power to Change has reviewed the community business sector.

While the concept of community business is maturing and becoming more widely understood, it remains difficult to get an accurate picture of the sector, the survey said.

Many of those surveyed are expecting steady growth in the coming years despite the difficult economic outlook, but challenges for the sector remain. The majority of businesses surveyed use grant funding to some extent especially in the early days of their business. Competition for grant funding will continue  to increase as government funding continues to fall and demand for services rises.

Vidhya Alakeson, chief executive of Power to Change said: ‘Austerity presents opportunities for community businesses to step into the gap left by the public sector. A quarter of the community businesses that were surveyed had not taken on new assets or embarked on new trading activities but plan to do so in the coming year.

‘Interviewees were confident in growing their business, citing diversification and economic efficiency as opportunities for growth.’

• Read the report here.